Will the Premier League kill Major League Soccer?

April 20, 2013

This past week, NBC announced that they will show every single match of the Premier League campaign in the United States beginning at the start of next season, which begins at the end of the summer in 2013.  This means that NBC will literally use its empire of networks to broadcast Premier League games from England during the weekends.  There is even a graphic going around, showing that on May 11th, 2014 – what is referred to as “Championship Sunday” or the last day of the Premier League season – there will be games on the following NBC channels: NBC, NBC Sports, USA, Bravo, CNBC, SyFy, Esquire, MSNBC, E! and so forth.  I’m sorry, but Premier League on SyFy seems to be quite a reach, but NBC has paid $250 million for the 2013 Premier League rights, and they want to do things the right way.  As their press release notes:

Details of the 2013-2014 NBC Sports Group Premier League programming include:

  • All 380 matches presented live on television with studio pre- and post-game coverage;
  • All 380 matches streamed live via NBC Sports Live Extra;
  • Games not aired on a designated NBCUniversal channel will be made available to distributors via Premier League Extra Time, a package of overflow television channels available at no extra cost for each of their customers who receives NBC Sports Network;
  • Championship Sunday – May 11, 2014, when all 10 Premier League matches will be available live on a different NBCUniversal channel;
  • 76 Spanish-language telecasts, 10 on Telemundo, 66 on Mun2;
  • More than 600 hours of Premier League original programming.

NBC SPORTS LIVE EXTRA: Every Barclays Premier League match will be streamed live via NBC Sports Live Extra, the NBC Sports Group’s live streaming product for desktop, mobile and tablets and, in most cases, on the digital platforms of participating cable, satellite, telco and other video subscription services. The vast majority of Barclays Premier League matches will be streamed via “TV Everywhere,” available on an authenticated basis to subscribers of these services.

NBC happens to have the rights for Major League Soccer as well, which they pay $10 million a year for.  In this current deal, NBC shows usually one or two MLS matches a week, with the Premier League they will be showing around 10 matches a week through the season.  Some people have discussed that the deal would be beneficial for MLS, as it would draw more soccer fans to the NBC network who could then carry over watching Premier League matches to MLS matches.  I believe that this logic doesn’t fully fit.  First, the MLS matches would usually not transition smoothly with the Premier League, unless the MLS started playing at 10 or 11am, which would mean much less fans in the stadium.  At this point in time, fans in the stadium are the lifeblood of the MLS, as the revenues from television, once distributed, aren’t even worth a quarter of a team’s salaries for a season.  In this, the Premier League may not kill the MLS, but could draw some major attention away from the professional soccer in the U.S.

Time will tell how this deal affects MLS, but I personally think obtaining the Premier League rights was a great move by NBC.  For many years, I was part of a that crowd of people who paid extra money to get Fox Soccer on their cable plans to watch matches early on Saturdays.  Now, NBC will bring the Premier League to a national audience on over-the-air channels, meaning that people can watch certain Premier League matches without paying.  I think that this move could really help heighten the popularity of the Premier League, though I’d be curious to see how well ratings do on NBC during college football season.  The games wouldn’t overlap, but I am not sure how many college football fans will turn on their television sets early to catch Fulham play Everton.

Did the “Beckham Experiment” work for the MLS?

November 22, 2011

On Sunday, the Los Angeles Galaxy won 1-0 in the Major League Soccer (MLS) Cup final over the Houston Dynamo.  The Galaxy are lead by U.S. international Landon Donovan, as well as England’s David Beckham and Ireland’s Robbie Keane.  Notably, the game is the last before Beckham’s 5 year contract ends with the MLS.  Now the MLS is a curious league, as it is operated as a single-entity organization where the league holds all the player contracts.  This was done to originally keep costs in check so as to not repeat the failures of the North American Soccer League (NASL).  The strict salary cap rules were relaxed to allow players like David Beckham come to play in the league, with each team given the same number of exceptions in regards to players who do not count under the salary cap.  This has allowed players such as David Beckham, Theirry Henry, Robbie Keane, and many others to come play in the MLS near the end of their career.

I don’t think there is any doubt that David Beckham has had a significant impact on the MLS, but the question is whether Beckham was worth the large salary he was paid by the league.  This exact question was the focus of a research paper in the International Journal of Sport Finance by Robert A. Lawson, Kathleen Sheehan, and E. Frank Stephenson in 2008, entitled “Vend it Like Beckham: Beckham’s Effect on MLS Ticket Sales” (volume 3, p. 189-195).  In this paper, the authors conclude that Beckham increased attendance at stadiums by around 55%, and that he was probably worth the investment.  While it seems likely that MLS recouped the salary they paid Beckham, I wonder if the MLS has really just boosted the popularity of soccer in America, and not necessarily the league.

I point again to Sunday, a day when Liverpool played Chelsea and the MLS Cup final was held.  Not only were fans able to watch Liverpool vs Chelsea live early in the morning, but they could also watch the replay on Fox in the earlier afternoon, at the same time as the NFL was playing its early games.  The day was filled with sports, finishing with the MLS Cup occurring the same time as Sunday Night Football.  The numbers show that the MLS didn’t do very well in terms of ratings, even with David Beckham and other big names playing in the game.  USA Today noted that the Liverpool vs Chelsea replay had double the viewers as the MLS Cup Final.

Fox’s taped Chelsea-Liverpool soccer game Sunday afternoon drew an overnight TV rating that nearly doubled the rating for ESPN’s primetime MLS Cup Sunday.

Fox’s soccer got a 1.5 overnight, which translates to 1.5% of households in the 56 urban TV markets measured for overnights. ESPN’s Los Angeles-Houston MLS title game, which included stars David Beckham and Landon Donovan, drew just 0.8% of households.

This is not a good sign for the MLS, though their timing and placement of the finals was probably not the best.  Scheduling during the same time as a prime-time game between the Giants and Eagles.

Return of the New York Cosmos?

April 19, 2011

Back in the 1970’s, the New York Cosmos took America by storm, boosting the popularity of soccer in the country.  The team brought in Pele, Beckenbauer, and Chinaglia to play for them, and soon saw attendance as high as 70,000 in New York to watch professional soccer.  Just a few decades earlier, the U.S. managed to beat England in the World Cup in 1950, yet no America’s really knew that this happened or even really cared.  In fact many thought the score was a misprint, and some newspapers reported the score differently.

So what made soccer popular all of the sudden in the 1970’s?  The professional league then, the North American Soccer League (NASL) started with a small number of teams but quickly expanded with hopes of becoming the next major professional sport league in North America.  The crown jewel of the league became the New York Cosmos in 1975, when Pele joined the team, and with Beckenbauer and Chinaglia, the trio of extremely well paid stars the team was the toast of the town, as mentioned in this New York Times article.  The team was so popular that rock stars like Mick Jagger would show up to meet the team and hang out with them in New York nightclubs.  But the New York Cosmos, while being the most popular and famous team in the history of the NASL, also would be the team that lead to its downfall.  After the Cosmos started to pay high salaries for stars, other teams in the NASL followed suit, and with rapid expansion, the league was soon too big to be sustainable, and was paying salaries that were much more than any team could afford.  And within less than a decade of Pele’s appearance in North America, the league folded, going broke as teams just could not control their spending.

And yet, still people remember the wonderful days of the New York Cosmos.  In fact one man named Paul Kemsley loved the Cosmos so much he bought up a bunch of their stuff, put them in boxes and locked them away in storage, guarding them as he grew older, much like the guardian of the Holy Grail in the one Indiana Jones movie.  In order to keep the Cosmos name and logo, Kemsley ran soccer camps each year using the teams name and logo which he had bought the rights to, and spend almost a million dollars in legal fees suing those who tried to use the Cosmos.

Now, the Cosmos seem to be on their way back.  Recently Don Garber, the commissioner of Major League Soccer (MLS) said that the final spot in the league (the 20th franchise) would be sold to a franchise that would be based in New York.  Speculation began to fly as to who this team would be, and who would buy them.  No real news has come of this yet, but the Cosmos have seem to have risen from the ashes and are making a push towards being that 20th team to enter the MLS.  Quite ironic, as the Cosmos and NASL’s failure were the model for the single-entity league structure which the MLS has employed to keep down player costs.  In the New York Times articles this issue is discussed, especially with Mr. Kemsley’s goal of being number one soccer franchise in the world.  And already the words have begun flying between Garber and Kemsley in regards to the Cosmos’ future.

Garber notes:

“They need to believe in the M.L.S. system, which is not about one team dominating everybody else, like the Cosmos did 30 years ago, and if they don’t believe in our system, we won’t sell them the team.”

Kemsley counters:

“We intend to meet the requirements of the M.L.S. We intend to play nicely.”

I’ll be curious to how the MLS responds to the Cosmos’ interest in joining the league.  The tradition is something that the MLS likes, but it surely brings back bad memories of the NASL’s death, and the U.S. losing out the 1986 World Cup bid to Mexico because of the NASL’s demise.  If the Cosmos do come back, I’m sure the league will make sure their pocketbooks are kept under tight control.

On a final note for everyone’s amusement, the Portland Timbers, one of the MLS’ newest franchises began play this past week, and their “mascot” Timber Joey has stepped in to take the place of Timber Jim at games.  Timber Jim supposedly brought a chainsaw to games for decades, and now Timber Joey fires up the chainsaw each time the Timbers score a goal (Timber Joey was busy the first night with a 4-2 victory over the Chicago Fire).  That said, the Timbers have been a real success this year in regards to attendance and fan support.  The Pacific Northwest is really looking to be the hotbed of soccer in the United States.

Video link to the chainsaw celebration here.

Cost of referee decisions at World Cup

June 19, 2010

For those of you waiting to watch the match between either Germany and Serbia or the U.S. and Slovenia on Tivo or on video because you missed it today, stop reading this post.  Today was quite an exciting day of World Cup matches, and the referees are coming under heavy scrutiny after a number of calls which the press have described as being too harsh or outright wrong.  The first notable call was the sending off of German striker Miroslav Klose, who was given a second yellow card in the first half, leading to an automatic red card and one match suspension.  Germany went on to lose the match to Serbia, meaning that Germany could win their last match and still potentially not qualify for the knockout round (if the other teams also pound on weak Australia and advance on goal differential).  The second notable call, which seems to be the talk of every U.S. media outlet, was the referee’s decision to award a foul in the box against the U.S. a split second before they struck home what would have been the third, and possibly winning, goal in the 85th minute.  The match ended in a draw, and England also went on to tie Algeria, throwing Group C into great confusion.

These calls got me thinking about the cost of being knocked out of the World Cup in the group stages, and the knockout round.  Digging a little deeper, I found that this year’s World Cup prize payouts were 60% higher than in previous years.  Additionally, the prize money paid to teams begins to increase at an increasing rate as teams advance further into the tournament.  Being knocked out in group play nets a national team $8 million and making it to the first round of the knockout stage gets only a $1 million increase.  Looking at Wikipedia the full payouts are

The difference between qualifying for the knockout rounds and playing in the group stage really isn’t that great, especially considering prize money is divided among the entire 23-man squad, and most of the teams in the tournament are stocked with stars who make a lot of money.  However, for a team like the U.S., this difference is quite dramatic as the $1,000,000 difference is equivalent to about $43,000 per player.  For American squad members who play in Major League Soccer (MLS), this is close to their annual salary (and possibly more).  I can understand some American players being quite disgusted with today’s decision; not only may it cost them a chance at advancing further into the tournament, it may have also cost them a good chunk of change.

One other thing I noticed is that clubs are compensated for each day one of their players appears in World Cup competition, including the 15 days leading up to the World Cup.  While most of the American squad play in Europe or Mexico, there are three MLS clubs which are being rather well compensated for having players appear in the World Cup.  The Los Angeles Galaxy have two players in the World Cup (Landon Donovan and Edson Buddle).  If the U.S. is knocked out on the coming Tuesday, each player will have completed 21 days of paid play at the rate of $1,500 a day.  That’s $63,000 for the L.A. Galaxy even if the U.S. national team is knocked out.  Sure this isn’t a huge amount of money, but it is equivalent to selling about 2,100 tickets at their average price ($30).  Just an interesting side note of another way teams in the MLS might profit from the World Cup other than the increased attendance that might come from a World Cup year.  For teams like Manchester United or Real Madrid which have a plethora of stars in the World Cup, they will see a significantly higher payout, but compared to the annual turnover of these clubs, it is probably more like a drop in the bucket.  My best guess is that the J-League in Japan may see the highest payout from the World Cup, as most of Japan’s squad are domestically based, and the league has just barely made a profit for the last several years.

The rise of Major League Soccer Attendance?

April 15, 2010

The MLS daily blog reported that as of this weekend, Major League Soccer has moved up the charts and now has a higher average attendance per game than the National Basketball Association or the National Hockey League.  The numbers of top average attendance per match for professional sport leagues in North America now sits at (as reported by the MLS Daily Blog):

1. NFL – 67,508.69 (2009 season)
2. MLB – 30,213.37 (2009 season)
3. MLS – 18,452.14 (2010 season, as of 04/11/2010)
4. NBA – 17,110.64 (2009/10 season)
5. NHL – 17,004.53 (2009/10 season)

Personally, I think this is more of a propaganda piece than anything else.  Sure the World Cup is fast approaching, which may help draw interest to soccer for the next year or so, but there are several things at work helping to shape these numbers.  First of all, the MLS has seen new teams in Seattle last year, and Philly this year.  The attendance for these two franchises has significantly helped raise the average attendance of a league, which still only has 16 clubs, compared to the 30 teams in both the NBA and NHL.  Due to this, a few strong teams with good attendance in the MLS can make a much bigger impact on the leagues average attendance.  Another thing of note, is that the MLS season is less than a month old, meaning most franchises have only played a handful of games, really the sample size for MLS attendance for the 2010 season is too small to really crown the league as the #3 attended sporting league in North America.

It is notable to consider that last years average attendance was just over 16,000 for the MLS, and that the league has hovered between 15,000 to 16,000 over the last few years.  This does point towards the MLS slowly evolving into a more stable and popular league, however, I would be curious to see about the revenues which are brought in on game day.  While the MLS may have a 1,000 more fans coming to games, many of these fans could be paying significantly lower ticket prices than if they attended an NHL or NBA game.

And then of course, we have to remember that the MLS is famous for having some franchises lie about their attendance.  While this is nothing new, the practice of reporting 50% more attendee’s at a match than actually came is not exactly standard practice.  For now, I’ll keep looking at the numbers reported by the MLS with a grain of salt, and look at other indicators as to the health and wellness of the league.

MLS players vote to potentially go on strike.

March 12, 2010

It’s been several weeks since the last big update in regards to the negotiations over the collective bargaining agreement between the MLS and the players.  Media reports had discussed the players and owners making some progress, and even returning to the table again to negotiate despite the fact that they had extended the deadline two or three times by now.  The general belief was that the players and the league (which owns all player contracts) would somehow get along nicely, and everything would be settled.

Things changed last night when the player’s union voted 383-2 in favor of a strike if there is no contract by March 23rd.  While this doesn’t mean the league will necessarily go on strike, Pat Onstead, goalkeeper for the Houston Dynamo and one of the representatives for the players said that they are a long way from coming to agreement on the current CBA.  From this moment, the league and players have about 11 days to come to a deal, otherwise a strike will be called.  If a strike were to be called, this could be severely detrimental to soccer in the United States.  With the World Cup less than 100 days away, the MLS was going to use the interest in the World Cup again this year to try and boost attendance at league matches.  A strike could cause the loss of this new potential influx of casual soccer fans, as well as drive away some of the existing fans of the league.  While fans may not be able to to go attend soccer matches, there is a wealth of substitutes in terms of other professional sport leagues in North America, as well as easy access to satellite and cable broadcasts of foreign leagues.  Who knows, an MLS strike combined with the World Cup could lead to a boost in viewership for the Premier League and other European clubs.

One thing the MLS strike will probably not have a potential effect will probably be the U.S. performance at World Cup.  Already, most of the squad (especially the starters) ply their trade overseas, mostly in the Premier League, Bundesleague, and other top leagues within Europe.  An MLS strike will probably make U.S. manager Bob Bradley more likely to pick players from leagues other than the MLS.  Because of this potential strike, Everton is already on the move, trying to extend the loan of U.S. international Landon Donovan.  The loan was set to expire this week, but with a strike looming, it is quite possible the loan will be extended.

So set your clocks, we have 11 days to see how this drama will unfold.  Personally, the MLS going on strike will not make much of a difference to me, even as a soccer fan living in the U.S.  It has been almost five years since I have attended a live match, and I have not bothered watching a televised MLS match other than playoffs in that period as well.  I think more and more American’s are becoming fans of European clubs, and with ESPN now showing the Premier League and Champions League, many fans will simply switch over to those channels, as not only can they watch a higher level of soccer, but they can now see more and more American’s playing in those leagues.

A quick note on the potential MLS players strike.

February 22, 2010

A few weeks ago I discussed the potential for Major League Soccer (MLS) players going on strike.  For the last few weeks, there has been relatively little discussion in the media about the labor talks, other than a few reports of positive talks between the players and the league/owners.  Even after the Collective Bargaining Agreement expired, the two sides continued to meet in extended talks which were seen as another positive development in the labor crisis.

Just today though, things seem to be heading in the opposite direction.  There have been a large number of articles discussing the imminent possibility of the league going on strike.  In his mailbag this week, Sports Illustrated writer Grant Wahl discusses the outburst of comments from both the players and owners as being very negative, and a very good sign that the league may not be starting up as scheduled this season (or possibly not even at all).

Now labor stoppages in professional sport leagues hasn’t been anything new, in the last few decades we have seen strikes and  in Major League Baseball, National Basketball Association, and the National Hockey League.  In each instance there has been evidence of significant declines in fan attendance because of these work stoppages.  While these big leagues have all recovered to some extent from the work stoppages, the question which keeps bothering me is “can the MLS survive a strike?  It is already well documented that the league has had many financial struggles over the years, and a strike seems to be exactly the thing which would make an already ambivalent public care even less about the sport of soccer, which already has had a tough time competing against the more popular sports of hockey, baseball, football, and basketball in North America.

While things may be tough, imagine being in the position of the owners of the new expansion franchise in Philadelphia.  Its one thing to not receive any attendance revenues because of a strike, but to not have any incoming revenue in a franchises first year in a league could be a death sentence for the franchise.  Another potential big loser would be the New York Red Bulls who have completed construction of a new 25,000 seat stadium.  The novelty effect tells us that a new stadium should help boost attendance at matches, but what happens if a new stadium is built, but no games are played there?

While the North American Soccer League failed because of overspending and expansion, could it be that such a strong attempt at avoiding increasing spending in the MLS could lead to the league’s demise?  Only time will tell.  Stay tuned for more MLS (and NFL & NBA) labor stoppage news and analysis.